GA Producer's Alliance

GA Producer's Alliance

An Open Letter to Congress….

Earlier this week the GPA drafted and dispersed the following letter to Congressional Leadership. We thank those who continue to fight on our behalf and encourage Congress to work together to bring swift and comprehensive legislation forward that will provide disaster relief in our time of need. Click here to read our letter!

Disaster Legislation Update

Members,

By now many of you are probably well aware of the continued stalemate taking place in regards to disaster legislation. While I wish that I could’ve dispersed this update sooner, I’ve spent much of the last 24 hours on the phone with people on both sides of the fence both asking questions and answering them as well. Yesterday the Senate voted to not invoke cloture, or rather not end the debate, on two key pieces of disaster legislation (note that it takes 60 votes to invoke cloture). The first, a GOP proposal, was voted down because it did not do enough in terms of providing disaster funding for Puerto Rico according to Democrats. The measure failed 44 – 69. The second, a bill passed out of the House in January, failed 46 – 48 due to the fact that it did not do enough in terms of including assistance for those who were recently affected by flooding in the Midwest and supposedly included too much in terms of disaster for Puerto Rico for the GOP to swallow.

While my next comment or two most likely will not remedy this situation it should come as a bit of solace. The issues surrounding the inability these pieces of legislation to gain traction have very little if any to do with the amount of funding designated for agricultural losses. As you have probably surmised it is mostly to do with the issue of Puerto Rico. To date, Puerto Rico has received more aid than any other state, territory, or province of this country from any single disaster. They have allegedly mismanaged these funds and to date still have a majority of the original amount appropriated on hand. The President, along with other conservatives, have said that they will not send more aid to Puerto Rico and the Democrats continue to push back on these statements. In sum, our much needed disaster aid is currently in the cross hairs of a major political narrative.

Furthermore, the map included with this update details the counties in the U.S. that received crop insurance indemnities in 2018. I’m sure that you can gather why some of the western counties are color coated red. Their localities are more prone to severe dry weather. However, note the small pockets of red in the South and Atlantic regions. The total area of agricultural areas impacted by Hurricanes Florence and Michael were limited in size. For me, while no excuse, it makes it easier to understand why this battle has been such a tough fight. The amount of people being hurt by the continued postponement of disaster is small in comparison to other political issues. A sense of urgency is lacking.

Now to the question on everyone’s mind, where do we go from here? Unfortunately, no one really seems to know at this point. There are so many diverging narratives in the current political landscape that it is difficult to gain traction. For us, we have to continue to support those who are tirelessly fighting on our behalves but also continue to exert pressure on those who are not. A Senate staffer explained to me today that a move made by Majority Leader McConnell last night to reconsider one of the bills should fast track its’ reemergence in the coming weeks. Additionally, I asked several today if the recent actions meant that we had to start from scratch and the consistent answer was no. That the dust needed to settle and that the fight would resume momentarily.

 

In terms of the fight, the GPA will be drafting a formal letter to the House and Senate Leadership this week to express our displeasure in the lack of response since the actual event of Hurricane Michael. Countless political leaders journeyed to Georgia in the days and weeks following the storm. All of which promised help and to date very little federal help has arrived. I do understand that other variables are at play, but that does not make up for the fact that a need has not been met.

 

-Trey

WHIP It Good….

Donald Trump Signing a bill

Members,

The political noise within our country’s capitol continues to grow. On Thursday the Senate held two votes which could force President Trump to remove the cap from his veto pen which he has yet to use since he took office. One vote pertains to the Yemeni Civil War and the other to the issue over the National Emergency issued in regard to border security. While both votes are important I know the attention turns to the latter of the two.

The first thing some of you will say is, why would Republicans in the Senate vote against a national emergency issued by a Republican president? The answer is really quite simple. The three branches of government (Executive, Legislative, and Judicial) are always reluctant to see another branch exceed in taking more power than they believe the Constitution originally deemed. In this instance, the Republican Senators in opposition of the President believe the Executive Branch is taking more power in declaring a national emergency than they should. This doesn’t necessarily mean that these Senators disagree with the President’s stance on border security, but rather his strategy. When asked about the Senate Republican’s opposition to his national emergency Mr. Trump commented that “he had been assured that the move was completely constitutional and legal.” While this is true, it does not mean that Congress has to go along for the ride.

Now to the two topics you all are most interested in I’m sure: trade and disaster. The champions for agriculture inside the Beltway continue to say that both issues will be resolved sooner rather than later. The Senate is supposedly going to bring the proposed disaster bill to the floor the last week of this month. We would hope that the House will then take up the said bill and pass it swiftly as well. Any modifications to the WHIP program will be done via the office of Secretary Perdue rather than legislatively. As for trade, the ball is in Mr. Trump’s court rather than in Congress’s. It is my speculation that we will see a Chinese – U.S. deal sooner rather than later. Reason for this thought is that the Chinese economic numbers are reading the worst they have in over a decade and here in the U.S. Mr. Trump is really needing a win to brag about on the road to 2020, which unfortunately is already here, but I digress.

Locally, the GPA is full steam ahead. We have passed our one year mark from our initial conversation which led to what is now the Georgia Producer’s Alliance. Yesterday I updated our membership list and we are officially at 100 paid entity members. At best guess this would equate to 400 – 500 votes (most entities consist of multiple members). In my opinion this is an incredible accomplishment and I’m very proud that we’ve been able to reach this milestone in 12 months. I hope that we can look back in another 12 months at 200 + members. As we’ve said all the while, our voice, our message, and our narrative carries MUCH greater weight as our numbers grow.

 

As we move into the end of the month I will be sending out annual statements for those whose membership renewals are due. We appreciate your support and we encourage you to reach out with questions or concerns.

– Trey

Will the US Win Big?

Will the US win big in The WTO’s decision?

 

The WTO just ruled against China’s agricultural subsidies. Will this translate to a big U.S. win?

Bilateral talks continue over a long list of Trump administration complaintsabout China’s trade, investor and currency practices. But last week China’s agriculture sector came under pressure, when the World Trade Organization ruled in favor of a 2016 U.S. complaint that China has consistently exceeded its WTO agricultural subsidy limits. Now China must either cut its subsidies to bring them in line with WTO rules, or the United States has the legal right to retaliate.

The world sees China as a manufacturing powerhouse. As my researchshows, however, China has emerged as a major agricultural power. The world’s largest agricultural producer and fourth-largest agricultural exporter, China has a huge impact on global agriculture markets because of the size of its consumer market and its importance as an importer.

What are agricultural subsidies, and how does this play into the broader discussion on China’s trade practices? Here’s what you need to know.

 

Beijing subsidizes the agricultural sector heavily. 

Countries provide payments and other support to give their farmers a competitive advantage, but these agricultural subsidies distort global markets and depress prices. Historically, rich countries like the United States were the primary providers of agricultural subsidies. But as China has grown richer, its subsidy levels have increased dramatically.

[Three things that the trade war with China won’t change]

 

China is now the world’s largest subsidizer of agriculture — Beijing provided an estimated $212 billion in farm subsidies in 2016, significantly more than the European Union ($100 billion), United States ($33 billion) or any other country.

Subsidies now make up a significant portion of earnings for Chinese farmers, accounting for 38 percent of their revenue for wheat, 29 percent for corn and 32 percent for rice. By comparison, U.S. subsidies constitute 8 percent of U.S. farm earnings for wheat, 4 percent for corn and 2 percent for rice.

Beijing’s support to China’s agriculture sector includes government purchases at above-market prices, as well as market price support programs, where farmers receive a direct payment from the government if market prices fall below a minimum set price.

Here’s the problem. Because they encourage farmers to produce more than they would otherwise, these subsidies are highly trade-distorting. China’s subsidies artificially boost domestic agricultural production, which displaces imports from entering the Chinese market and lowers global prices. This hurts agricultural producers and exporters around the world.

 

And there’s another issue: China’s policy of supporting producers by purchasing agricultural commodities at above-market prices has led to the accumulation of massive government stockpiles. By 2016, China had amassed 60 percent of the world’s cotton supplies, over 50 percent of its corn, 40 percent of wheat and 21 percent of soybeans.

To dispose of these large stocks, the government periodically auctions them off at below-acquisition cost. Analysts believe China’s policies exert “a colossal influence” on world prices, given the size of its state reserves. A mass sell-off from China’s sugar reserves in 2016, for example, helped to push the global price of sugar down by almost a quarter.

 

Why the boom in China’s agricultural subsidies?

Beijing wants to bolster rural incomes and reduce high levels of rural-urban inequality, which the government fears could be politically destabilizing. Economists argue, however, that there are better ways for Beijing to support farmers and promote rural development, including improvements in rural pensions, health care, education and infrastructure.

[What we really know about China’s Reform and Opening Up]

 

But China’s subsidies also reflect the leadership’s push to increase domestic food supply, and reduce reliance on imports. The Chinese government has long had the goal of achieving 95 percent self-sufficiency in wheat and rice, which it sees as strategic commodities essential to China’s food security. In part, this is because Beijing believes the United States and its allies continue to dominate global agricultural markets, potentially shutting China out in the event of a future security conflict.

China argues that it is hypocritical for the United States to criticize agricultural subsidies, when Washington has historically been a heavy subsidizer of its own agriculture sector.

 

So what’s at stake for the U.S.? 

As the world’s biggest agricultural exporter, the United States has a major commercial interest in securing a reduction in Chinese subsidies.

Agriculture accounts for nearly 10 percent of total U.S. exports. This is one of the few sectors of the U.S. economy that runs a trade surplus, helping to reduce the size of the country’s overall trade deficit. U.S. agriculture depends heavily on foreign markets: More than a third of U.S. farm revenue comes from exports.

And China is the largest market for U.S. agricultural exports, which peakedin 2012 at $26 billion. U.S. agricultural exports have since fallen by more than 25 percent, due in large part to the expansion of China’s subsidies. U.S. trade officials believe that U.S. exports would be considerably higher if not for Chinese subsidies and other trade barriers.

 

And what happens next?

China will almost certainly appeal this ruling. This means the case goes to the WTO’s Appellate Body, which effectively acts as a “supreme court” for trade disputes.

[Trump is breaking the WTO. Will China want to save it?]

 

But the Appellate Body, well, is short of bodies. The Trump administration has been blocking all appointments to the Appellate Body as the terms of its current judges expire. The Appellate Body has been reduced to three judges — the minimum needed to adjudicate a dispute — with the remaining four of its seven seats vacant.

Two of those judges will reach the end of their terms in December, leaving the Appellate Body without enough judges to review cases.

And once an appeal is lodged, a dispute settlement panel decision remains blocked until the decision of the Appellate Body. This means that without a functioning Appellate Body, China may be able to simply block the WTO ruling on its agricultural subsidies, placing the case in legal limbo.

The WTO’s dispute settlement system is designed to enforce trade rules, and most member countries regard this system as one of the strongest and most effective enforcement mechanisms in international law.

What happens next on China’s agricultural subsidies is uncertain. Trump has been openly hostile to the WTO’s rules-based system. The United States has won an important WTO victory against China’s subsidies but — with the Appellate Body in jeopardy — may be unable to enforce it.

 

Kristen Hopewell is a senior lecturer in international political economy at the University of Edinburgh. She is the author of Breaking the WTO: How Emerging Powers Disrupted the Neoliberal Project (Stanford University Press, 2016).

Disaster Relief Coming Along….

Members,

I hope this note finds you all doing well as we enter this 3rd month of 2019. The big news in the realm of Ag policy in recent weeks is that a group of bipartisan Senators from Georgia, Florida, Alabama, and South Carolina have introduced a disaster relief package in the Senate. The bill includes approximately $13.6 billion in disaster funding. Those funds include approximately $3 billion in funding for critical agriculture disaster relief for farmers recovering in the wake of Hurricane Michael and other natural disasters across the country, development grants for small, rural communities impacted by natural disasters in 2018, assistance for veterans’ health facilities, and military construction projects devastated by Hurricane Michael, emergency funds for critical timber, watershed, and wastewater infrastructure needs, restoration of highways, aviation facilities, and other transit projects damaged by natural disasters, and an additional $600 million in nutrition assistance for Puerto Rico in response to President Trump’s disaster declaration.

Lawmakers are working to iron out differences between several versions of disaster aid, including H.R. 268, a bill that was introduced by Rep. Nita Lowey (D-NY) and has passed in the House, and Senate efforts which are expected to include at least some of the contents of S. 572 introduced by Sen. David Perdue (R-GA). According to Sen. Thom Tillis (R-NC), a co-sponsor of S. 572, the current sticking points are aid for Puerto Rico and giving states jurisdiction to deliver disaster aid to farmers. Senate Appropriations Chairman Richard Shelby (R-AL) is aiming to reach a compromise and pass a relief package before the March 18 recess week, but that could be difficult.

Last Tuesday Governor Brian Kemp and Commissioner of Agriculture Gary Black were in Tifton to talk on the subject of disaster. Georgia’s Senators and some representatives, including Austin Scott, participated via teleconference. Georgia’s Congressional Members reassured the audience that help was on the way via WHIP. They said they hoped to see it voted on before the end of the month. Specifics were not included during this meeting. I will be in Washington next Tuesday through Thursday and it is my hope that more details can be procured at that time.

 

In terms of trade, Trump Administration Trade Representative appeared before Congress recently where he spoke to the administration’s hope that a deal would be made between the U.S. and China soon. This expanded off of several comments that Mr. Trump made on Twitter over the previous week regarding a pending trade resolution as well. The administration had planned to raise tariffs on another $200 billion of Chinese imports last week but tabled that move citing a near term deal in the works. However, it should be noted that the Mr. Trump has no problem walking away from a deal as he did with North Korea recently. He was quoted as saying, “sometimes you’ve just got to walk away.” For the sake of all our bottom lines I hope that the meeting between President Xi and Mr. Trump goes over more smoothly than that of Mr. Trump and Chairman Kim.

Mark Your Calendars…

Crop watering

University of Georgia Cooperative Extension will host two free workshops in March to show Georgia and Florida cotton and peanut growers how to increase yield and profitability through technology-driven irrigation tools… Read More

Still Hopeful…

Ruined Cotton Plants

Members,

It has been quite a week within the world of politics and I for one am exhausted from talking, reading, and hearing about it at this point. I have both received and placed an abundance of calls this week in regards to disaster legislation in this week’s measures. Late last night both Houses of Congress passed a measure to fund the government through the end of the fiscal year and this legislation included approximately $1.38 billion in funding for 55 miles of border wall in the Rio Grande Valley. President Trump has agreed to sign this legislation and forego another shutdown but at the same time issued a national emergency so that he can pay for his wall via different means.

In terms of disaster, we went into last weekend thinking that we would see disaster legislation tied to this week’s spending packages but that was not the case. Why was disaster absent? That’s a great question. While I do not have the answer I have several ideas as to why this was the case. The current political narrative has been hijacked by those who are for and those who are against the wall. Both parties have been consumed with this topic and keeping the government funded. That being said, other pieces of legislation, like disaster, would only muddy the already clouded waters and only further complicate the votes needed to keep the government funded and running. While I am disappointed disaster legislation was absent, I am at the same time pleased that we have avoided another shutdown.

I am still hopeful and I still do think that we will see disaster legislation circle back to the forefront of debate within the coming weeks. The Georgia delegation, Congressmen Sanford Bishop and Austin Scott, and Georgia’s two Senators, David Perdue and Johnny Isakson have fought hard to procure a comprehensive disaster bill that would help tie over Georgia producers in this time of need. After conversations with these individuals this week I can assure you that they are as upset as we are in regard to this lack of action on behalf of the federal government. I hate to be the bearer of bad news, but this administration is not farmer focused at the moment. Both President Trump and Vice-president Pence made trips to Georgia post Michael and both promised to send “help” to our local communities. As time has passed, it has been seen that their focus is elsewhere (i.e. erecting a wall for election 2020 talking points).

In terms of the “wall” and the issuance of the National Emergency I have VERY mixed emotions. The first thing you learn in Political Science 1101 are basic terms such as state and sovereignty. One key component of sovereignty is land that has established and protected borders. I do believe that the United States needs to protect and secure its’ borders but doing so via a National Emergency scares me. This creates a thing such as precedent. If the administration is allowed to accomplish this via a National Emergency, what would prevent a very different President in the future from doing the same thing in terms of very liberal policy such as healthcare? See my point? It’s not as clear cut as we might like to think and it has historic implications.

 

In sum, we don’t have disaster today but we have more people fired up now than ever. It’s unfortunate that we have arrived at this point, it may however help us achieve our ultimate goal. With that said, I will acknowledge time is of the essence and there are some operations have need help sooner rather than later.

That is all for now. I hope our next update brings forth more positive news.

– Trey

On A Positive Note…

Government Shutdown

Members,

Thirty – two days and counting since the partial government shutdown began and no end seems to be in sight. The two houses of Congress and the Executive Branch continue to be at odds over a solution to end this chaos. Members of the Georgia Delegation, Congressmen Austin Scott and Sanford Bishop specifically, continue to fight for disaster aid in the House. Unfortunately, their efforts will likely not yield any results until the issue of the shutdown can be concluded. I do think we will see a disaster program in response to Hurricane Michael and I do think it’ll be better than the 2017 WHIP program that was administered during calendar year 2018. However, I do think it will be some time before those disaster payments make their way to producer’s pocket books. I know this is not what many of you are wanting to hear at the moment but we are all victims of the current political situation that has engulfed our federal government.

On a positive note, Farm Service Agency (FSA) service centers will be open beginning January 24 to provide the majority of FSA services needed by producers. The U.S. Department of Agriculture (USDA) has recalled more than 9,700 FSA employees to keep offices open from 8 a.m. to 4:30 p.m. weekdays beginning January 24. For the first two full weeks (January 28 through February 1 and February 4 through February 8), FSA offices will be open Mondays through Fridays. In subsequent weeks, offices will be open three days a week, on Tuesdays, Wednesdays, and Thursdays.

Locally, the GPA is preparing to host our Inaugural Annual Meeting at noon this Thursday at the Tiftarea Conference Center in Tifton, Georgia. Lunch will be provided and I hope that each of you will be able to attend. I know that many of you, like myself, have been very busy getting 2019 kicked off but I hope that you will make a point to attend and see what the GPA has in store for the coming year.

Special note – the Tiftarea Conference Center is located directly across from Cracker Barrel in Tifton next to the Holiday Inn. I’m sure many of you are accustomed to attending meetings at the RDC in Tifton and I just wanted to point out that this is a different location. I just wanted to make special note of this to avoid any confusion. The physical address is 804 7th St W, Tifton, GA 31794. Feel free to arrive a few minutes early on Thursday.

That is all for today. I will be sure to give you all an update as soon as anything surfaces in regard to a deal being made in regard to the shutdown or the pending disaster program(s).

– Trey